LOUISVILLE, KY, May 07, 2002 – Tricon Global Restaurants, Inc. (NYSE:YUM) today announced it has completed its acquisition of Long John Silver’s and A&W All-American Food Restaurants owned by Yorkshire Global Restaurants (YGR), growing the world’s largest restaurant system to more than 32,500 restaurants.
“This is a very exciting day for Tricon,” said David Novak, Tricon Chairman and Chief Executive Officer. “Today’s acquisition enables us to accelerate our multibranding strategy and drive global growth by offering consumers two brands and more choice in one restaurant. We have successfully tested offering Long John Silver’s and A&W food in our existing KFCs and Taco Bells. Based on significant increases in average unit volume and profits, and very positive customer feedback, this is a win-win for our shareholders and customers alike. We are confident multibranding is a key enabler for accelerating the renewal of our existing asset base and adding new units with excellent returns.”
Tricon is already the worldwide leader in multibranding, with 1,500 such restaurants generating $1.5 billion in annual system sales from KFC, Taco Bell and Pizza Hut combinations. In 2000, Tricon entered into a license agreement with YGR to test multibranding options. Since then, 81 KFC/A&Ws, six KFC/Long John Silver’s and three Taco Bell/Long John Silver’s have opened. Results far exceed Tricon’s cost of capital. The acquisition of Long John Silver’s and A&W All-American Food Restaurants adds nearly $1.1 billion in system sales and more than 2,000 franchise and corporate restaurants to Tricon’s portfolio of category-leading brands.
2-for-1 Stock Split
The Company also announced that its Board of Directors has approved a two-for-one split of the Company’s outstanding shares of common stock. The stock split will be effected in the form of a stock dividend and will entitle each stockholder of record at the close of business on June 6, 2002 to receive one share for every outstanding share of common stock held on the record date. The stock dividend will be distributed on June 17, 2002. Tricon Global Restaurants Common Stock will begin trading on a split-adjusted basis on June 18, 2002.
“We are very pleased to inform our shareholders, many of whom are Tricon employees, of this stock split. The momentum of our business continues to be very positive, driven by the execution of our highly focused strategies of international new unit expansion, multibranding leadership and customer-focused operations. We are confident this momentum will continue and we are gratified to share the Company’s success with our shareholders,” Novak said.
Tricon Global Restaurants, Inc, based in Louisville, Kentucky, is the world’s largest restaurant company in terms of system units with over 32,500 restaurants in more than 100 countries and territories. Four of the company’s restaurant brands – KFC, Pizza Hut, Taco Bell and Long John Silver’s — are the global leaders of the chicken, pizza, Mexican-style food and quick service seafood categories, respectively. Since 1919, A&W All-American Food has been serving a signature frosty mug root beer float and all-American pure-beef hamburgers and hot dogs, making it the longest running quick service franchise chain in America.
To reflect the Company’s expanding portfolio of brands, Tricon announced it will change its corporate name to Yum! Brands, Inc. YUM is also the Company’s ticker symbol on the New York Stock Exchange. The name change is subject to approval of the Company’s shareholders, which is expected at its annual shareholders meeting on May 16, 2002.
This announcement contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These statements include those identified by such words as may, will, expect, anticipate, believe, plan and other similar terminology. These “forward-looking” statements reflect management’s current expectations regarding future events and operating and financial performance and are based on currently available data. However, actual results are subject to future events and uncertainties, which could cause actual results to differ from those projected in this announcement. Factors that can cause actual results to differ materially include: changes in global and local business, economic and political conditions in the countries and territories where Tricon operates; changes in currency exchange and interest rates; changes in commodity, labor and other operating costs; changes in competition in the food industry, consumer preferences, spending patterns and demographic trends; the effectiveness of our operating initiatives and advertising and promotional efforts; new-product and concept development by Tricon and other food-industry competitors; the success of our refranchising strategy; the ongoing business viability of our franchise and license operators; our ability to secure alternative distribution to our restaurants at competitive rates and to ensure adequate supplies of restaurant products and equipment in our stores; our actuarially determined casualty loss estimates; changes in legislation and governmental regulation; and changes in accounting policies and practices. Further information about factors that could affect Tricon’s financial and other results are included in the company’s Forms 10-Q and 10-K, filed with the Securities and Exchange Commission.